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Homework answers / question archive / Explain how the consumer price index and GDP work together to measure price index change from year to year
Explain how the consumer price index and GDP work together to measure price index change from year to year.
The price changes in a given year are analyzed using the CPI and the GDP. If the prices are getting higher, then the value of GDP will be higher. This is because the GDP is determined by the product of price level and the units of products. The value of CPI represents the percentage of price changes in a given year.
